KANAKA CHALAM VOLETY,CALIFORNIA vs. INCOME TAX OFFICER, WARD-12(1), HYDERABAD

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ITA 1312/HYD/2025Status: DisposedITAT Hyderabad17 September 2025AY 2016-17Bench: SHRI G. MANJUNATHA, HON’BLE (Accountant Member), SHRI RAVISH SOOD, HON’BLE (Judicial Member)8 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(A) erred by upholding the ex-parte penalty without considering the assessee's valid contentions regarding improper service of notices and the pending appeal against the assessment order. It held that the Assessing Officer ought to have kept the penalty proceedings in abeyance as per Section 275 of the Income Tax Act. Therefore, the Tribunal set aside the CIT(A)'s order and remanded the matter back to the AO for reconsideration of the penalty after the outcome of the appeal against the assessment.

What were the facts?

The assessee failed to file income tax return for AY 2016-17, leading to an ex-parte assessment under Section 147 read with Sections 144 and 144B and subsequent penalty proceedings under Section 271(1)(b) for non-compliance with notices. The assessee contended that notices were sent to an incorrect email ID and that an appeal against the assessment order was pending, requesting the penalty proceedings be kept in abeyance under Section 275. The CIT(A) upheld the penalty ex-parte without considering these facts.

What were the issues?

Whether the penalty under Section 271(1)(b) for non-compliance was justified given the assessee's claims of improper notice service and a pending appeal against the assessment order, and whether the penalty proceedings should have been kept in abeyance under Section 275 of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 143(3),Section 142(1),Section 144,Section 144B,Section 271(1)(b),Section 274,Section 275,Section 271D

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad

आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:-

1. 1. निर्धाररती/The Assessee : Kanaka Chalam Volety, C/o.M/s. Nitin J Shetty & Co., Chartered Accountants, Volet Complex, S. Karnataka. 2. रधजस्व/ The Revenue : The Income Tax Officer, Ward 6(4), Hyderabad.

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